Now is prime time to save
Every decade brings a new, exciting phase of life. You’ll go from starting a career to building one to really being an expert in your field. And along the way you may grow your family as well and check off some bucket list goals for yourself. At the same time as all this excitement, you may start to think about the legacy you want to leave, your retirement plan and how you’ll send your kids to college.
Some questions you’ll want to ask yourself as you think about your legacy include, are you preparing for the future you want? How can you ensure you are on track to make the most out of these important decades?
To get you started in the right direction, here are three things you should be doing to optimize and protect your savings.
1. Whole life insurance benefits you today and in the future
When many people hear life insurance, they think it’s something to put off until later. Life is so busy right now, it’s the last thing on your mind. However, it can not only provide helpful financial protection for your loved ones if you happen to pass away prematurely, it can also help you diversify your portfolio.
As you pay for your policy, your cash benefit builds tax-deferred1. Over time, the cash value can grow to potentially be used for opportunities such as helping to fund a new business or buy a home.2,3 Further, the premiums are guaranteed to never increase once you purchase the policy, and the death benefit is permanent.4
Term life insurance can be an attractive choice for those who are looking for more. This may be a great option if you’re not at a place to commit to permanent, whole life insurance. While with a term life policy you get coverage for a defined length of time, there are policies that can be converted to permanent life insurance for part or all, of the coverage period down the line too.
2. Protect your income
Your ability to earn income is your most important asset. Most people don’t think about until it’s too late, but what would happen if they became disabled and could no longer work? How would you continue to support your family and yourself? Would you need to drain your savings and retirement? A payment into disability insurance ahead of time can help protect your savings and ensure you remain financially stable if the unexpected happens.
3. Optimize your retirement accounts
One of the best saving strategies is to contribute to retirement accounts. The main options are Individual Retirement Accounts (IRAs) and 401(k) employer-sponsored plans.
If your employer offers a 401(k) program, any contributions you make (up to) won’t count towards your taxable income. This lowers the amount of taxes you pay and can potentially even drop you into a lower tax bracket.
If you opt for an IRA, you can contribute up to $6,500 per year (as of 2023) which may be tax-deductible. Restrictions apply if you exceed the income limits or are covered by a retirement plan at work.
Additionally, many employers offer a match to employees up to a certain percentage of their salary that they contribute to the company 401(k) plan. Be sure to look into your employer match rate and contribute the minimum required for a match, which will double your contribution—and growth power.
Gain confidence about your future
Your money is not going to maximize itself. While you are busy growing your career and doing what you do best, a great way to take inventory of your finances and ensure you’re on the right track is by talking with a financial professional. A trained eye can review your income, savings, insurance, budgets and more to spot opportunities. They can then help you figure out how to best balance your needs today with your dreams for the future.
